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Secretary of State Albright left Washington for her first official visit to the Middle East, with a Clinton administration spokesman saying she would attempt to convince Israel and the Palestinians that they have a common destiny in peacemaking. Asked whether she also would press for reconsideration of the old formula of trading land for peace, the spokesman said, "Yes." But the White House denied that she would try to pressure the two parties into reopening peace negotiations.

No one in the White House ordered the Democratic Party to bend the rules on raising funds for political campaigns, former chairman Don Fowler told the Senate Governmental Affairs Committee. In an opening statement, Fowler took responsibility for mistakes made by the party's national committee during the 1995-96 election cycle. But he said they were errors of "process, not intent." The party has returned $3 million illegally donated in that period, much of it from Asian business interests.

Army Gen. Henry Shelton, President Clinton's new choice to be chairman of the Joint Chiefs of Staff, headed to confirmation hearings before the Senate Armed Services Committee. Dan Coats (R) of Indiana, a member of the panel, called Shelton "a terrific selection" who "will be easily confirmed."

US businesses increased their productivity at the fastest pace in 3-1/2 years between April and June, the Labor Department reported. It measured the gain at 2.7 percent, 1.3 percent higher than in the first quarter of the year.

Cigarette makers vowed to fight a $14 billion lawsuit filed by the state of Texas and said they would cut no more deals to pay for the treatment of ill smokers. The suit is scheduled to be heard in Texarkana beginning Sept. 29. Attorneys for the defendants said the industry stand was based on concerns that a tentative $368.5 nationwide settlement had bogged down in Congress and might not pass.

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